OFFICIAL STATE GAZETTE

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1 OFFICIAL STATE GAZETTE No 207 Tuesday 26 August 2014 I. GENERAL PROVISIONS MINISTRY OF THE PRESIDENCY 8926 Royal Decree 679/2014 of 1 August 2014 establishing the control Regulation on external trade in defence material, other material and dual-use items and technologies. The First Final Provision of Law 53/2007 of 28 December 2007 on the control of external trade in defence and dual-use material provides that the Government, by Royal Decree, will dictate the regulatory norms for its implementation. The aim of the Regulation controlling external trade in defence material, other material and dual-use items and technologies is to establish the conditions, requirements and procedures to control said external trade in defence material, other material and dual-use items and technologies, in order to duly comply with the regulations of the European Union and international commitments entered into by Spain, and contribute to promoting peace, stability and security at global and regional level and to protect general national defence interests and the State's foreign policy. In order to include all regulations on the control of external trade in these items in a single text, this Royal Decree recasts the provisions adopted in the Regulation controlling external trade in defence material, other material and dual-use items and technologies approved by Royal Decree 2061/2008 of 12 December 2008, amended by Royal Decree 844/2011 of 17 June Moreover, it updates the regulation of external trade transfers of defence material, other material and dual-use items and technologies and to that end incorporates and implements European regulations and commitments made in international fora to which Spain is party, without prejudice to compliance with administrative authorisation requirements arising from the general law on the transfer of weapons not within the ambit of this Royal Decree. This regulation is subject to the following: The 10 April 1972 Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction. The 3 March 1980 Convention on the Physical Protection of Nuclear Material. The 13 January 1993 Convention on the Prohibition of the Development, Production, Stockpiling and use of Chemical Weapons and on their Destruction. The 3 December 1997 Convention on the Prohibition of Anti-personnel Mines and the 3 December 2008 Oslo Convention on the Prohibition of Cluster Munitions. Resolution 55/255 of the United Nations General Assembly of 8 June 2001 approving the Protocol against the illicit manufacturing of and trafficking in firearms, their parts and components and ammunition, supplementing the United Nations Convention against transnational organized crime; the Programme of Action of the United nations to prevent, combat and eradicate the illicit trade in small arms and light weapons in all its aspects. Resolution 1540 of the United Nations Security Council of 28 April 2004 intended to prevent the proliferation of weapons of mass destruction and specifically to prevent non-state agents from acquiring and using them. The Arms Trade Treaty passed on 2 April 2013 by the United Nations General Assembly, signed by Spain on 3 June 2013 and ratified on 2 April Spain is provisionally applying Articles 6 and 7 of that treaty referring to Prohibitions and Export and export assessment until its entry into force. Recommendation in respect of defence exports by the Organisation for Economic Cooperation and Development (OECD) for application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Framework Agreement of 27 July 2000 implementing the Letter of Intent for the restructuring and integration of the European defence industry of 8 July 1998.

2 Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment. Council Common Position 2003/468/CFSP of 23 June 2003 on the control of arms brokering. Council Joint Action of 22 June 2000 concerning the control of technical assistance related to certain military end-uses. Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of the export, transfer, brokering and transit of dual-use items, amended by Regulation (EU) No 1232/2011 of the European Parliament and of the Council of 16 November 2011 introducing the new European Union general export authorisations, and by Regulation (EU) No 388/2012 of the European Parliament and of the Council of 16 November 2012 updating Annex I of Council Regulation (EC) 428/2009 of 5 May 2009 in accordance with the changes agreed at the international control and non-proliferation regimes. Regulation (EU) No 258/2012 of the European Parliament and of the Council of 14 March 2012 implementing Article 10 of the United Nations Protocol against the illicit manufacturing of and trafficking in firearms, their parts and components and ammunition, supplementing the United Nations Convention against Transnational Organised Crime and establishing export authorisation, and import and transit measures for firearms, their parts and components and ammunition. Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009 simplifying terms and conditions of transfers of defence-related products within the Community and subsequent updates of the list of items. Commission Recommendation of 11 January 2011 on the certification of defence undertakings under Article 9 of Directive 2009/43/EC of the European Parliament and of the Council of 6 May The external trade control system applying to defence-related equipment and technology has undergone several changes. Under Royal Decree 480/1988 of 25 March1988 establishing the attributions, duties and operation of the Inter-Ministerial Regulatory Board on External Trade in Defence Material and Dual-use Items and Technologies, currently revoked, the Inter-Ministerial Regulatory Board on External Trade in Defence Material and Dual-use Items and Technologies, replacing the defunct Inter-Ministerial Regulatory Board on External Trade in Weapons and Explosives which had been created under Royal Decree 3150/1978 of 15 December 1978, and the Special Register of External Trade Operators in Defence Material and Dual-use Items and Technologies were created. Chapter I, Sections 2 and 3 respectively of this new regulation regulate the make-up and procedures of the Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-use Material (JIMDDU), created by Royal Decree 824/1993 of 28 May 1993 approving the Regulation on external trade in defence and dual-use material, and the Special Register for External Trade Operators in Defence and Dual-use Material (Spanish acronym REOCE), created under Royal Decree 1782/2004 of 30 July 2004 approving the control Regulation on external trade in defence material, other material and dualuse items and technologies. Having regard to the punitive and sanction system, the Anti-smuggling Act, Organic Law 12/1995 of 12 December 1995 amended by Organic Law 6/2011 of 30 June 2011 defining as a criminal offence, inter alia, the unauthorised export of defence material, other material or dualuse items and technologies or export with authorisation obtained by fraudulent means, applies. The provisions of Organic Law 10/1995 of 23 November 1995 on the Criminal Code, whose Articles 566 and 567 contain references to weapons, war ammunition and chemical weapons and sanctions applicable to the manufacture, commercialisation, trafficking establishment of arms depots that are not authorised by the law or the competent authorities, likewise apply. Organic Law 10/1995 of 23 November 1995 was, in turn, amended by Organic Law 5/2010 of 22 June 2010 to include biological weapons, anti-personnel mines and cluster munitions putting them in the same category as the above-mentioned weapons. Article 345 of the Criminal Code was also amended to, inter alia, characterise the appropriation of nuclear material or hazardous radioactive elements as a criminal act. This Royal Decree updates the regulation of external trade transfers of defence material, other material and dual-use items and technologies in the following important ways: It adapts Spanish legislation to Regulation (EU) No 258/2012 of the European Parliament and of the Council of 14 March 2012 establishing export authorizations and import

3 and transit measures for firearms, their parts and components and ammunition, simplifies procedures for temporary exports of these weapons, requires expressed authorisation from the authorities of the countries of transit (with exceptions) and makes the marking of firearms prior to export mandatory. The European Union's new general export authorizations for the export of certain dualuse items and technologies to certain countries will be incorporated into Spanish legislation. In the interest of further simplification, the Secretariat of State for Trade of the Ministry of Economy and Competitiveness is authorised to handle all of the procedures. The Deputy Directorate-General of International Trade in Defence and Dual-use Material shall be responsible for processing the applications referred to in this regulation. The makeup of the JIMDDU is modified to bring it into line with Royal Decree 1/2012 of 5 January 2012 amending Royal Decree 1823/2011 of 21 December 2011 restructuring ministerial departments. Details are given explaining the procedure applicable to intra-community transfers of defence material from any Member State of the European Union. A safeguard clause has been introduced in the case of certified recipients, in accordance with the criteria set out in Article 9 of Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009, that fail to respect the conditions attached to a general transfer license or where public order, public safety or essential security interests are at stake. Commission Directive 2010/80/EU of 22 November 2010, Commission Directive 2012/10/EU of 22 March 2012, Commission Directive 2012/47/EU of 14 December 2012 and Commission Directive 2014/18/EU of 29 January 2014 have been transposed, and the updates of the European Union's Common Military List of defence items adopted by the Council on 17 March 2014 have been incorporated. The period of time during which the holders of the requisite authorisations must keep the documents related with transactions has been extended from four to ten years to bring it into line with the period established in the Arms Trade Treaty. A special mention has been included in the Arms Trade Treaty passed on 2 April 2013 by the United Nations General Assembly, signed by Spain on 3 June 2013 and ratified on 2 April 2014, to apply Articles 6 and 7 of that treaty referring to Prohibitions and Export and export assessment. A specific reference to the serious violation of international human rights law or of international humanitarian law has been included. The system whereby authorisations can be rectified has been amended. These may only be requested to modify the effective term and monetary value and are not necessary in the case of customs change. Moreover, the number of rectifications for each original license has been limited to two and the rectification's period of validity is the same as that of the original license as from the latter's date of authorisation. Control document requirements have been modified, especially in the case of firearms for civilian use. The annexes containing the licensing forms, REOCE inscription requests and control documents have been updated. Annex II has been divided into two sections, Annex II.1 for firearms for civilian use and Annex II.2 for anti-riot items. The annexes corresponding to the lists of items subject to control have been updated to bring them into line with changes in the lists drafted by international control and non-proliferation fora. The time within which to re-transfer goods in the case of temporary transfers has been extended in accordance with Article 140 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code. Customs processing has been simplified to avoid double authorisation for the same procedure. Certain operations involving explosives and related equipment included on the lists of equipment which can be used for domestic repression require authorisation as a result of the European Union imposing restrictive measures on certain destinations. These authorisations refer exclusively to items for civilian use employed in the mining and infrastructure sectors. Throughout the process, the regulatory text now being approved received a favourable report from the JIMDDU at its meeting of 7 March 2013 and from the Spanish Data Protection Agency and the Standing Interministerial Commission on Weapons and Explosives (Spanish acronym CIPAE). It was also subject to the mandatory sector-wide hearing on 8 March 2013 pursuant to Article 24(1) c) of Law 50/1997 of 27 November 1997 on Governance.

4 By virtue hereof, at the proposal of the Ministers of the Economy and Competitiveness, Foreign Affairs and Cooperation, Defence, Finance and Public Administration, Interior, Industry Energy and Tourism and the Presidency, in accordance with the Council of State and subsequent to Cabinet deliberations at its meeting of 1 August 2014, Single Article. Approval of the Regulation. BE IT ENACTED: The Regulation controlling external trade in defence material, other material and dualuse items and technologies, the text of which follows this Royal decree, is hereby approved. Sole additional provision. Legal regime governing weapons, explosives and ammunition for civilian use. This regulation shall apply without prejudice to the provisions of the Weapons Regulation passed by Royal Decree 137/1993 of 29 January 1993, the Explosives Regulation passed by Royal Decree 230/1998 of 16 February 1998 and the Pyrotechnics and Ammunition Regulation passed by Royal Decree 563/2010 of 7 May 2010, their amendments and, as the case may be, the regulations replacing them. First transitional provision. Authorisations currently in force. Transactions based on transfer authorisations issued in compliance with regulations in force prior to the entry into force of this Royal Decree may be undertaken in accordance with the rules in force at the time of authorisation within the effective term of the respective licences. Second transitional provision. Pending applications. Applications for transfer authorisation submitted and pending resolution prior to the entry into force of this Royal Decree shall be resolved in accordance with the provisions of the latter. Sole repeal provision. Repeal of Regulations. 1. Royal Decree 2061/2008 of 12 December 2008 approving the control Regulation on external trade in defence material, other material and dual-use items and technologies is hereby repealed. 2. All provisions of equal or lower rank than and conflicting with the terms of this Royal Decree are hereby repealed. First final provision. Constitutional authority. This Royal Decree is enacted in accordance with the terms of Article 149(1) 4) and 10 of the Spanish Constitution vouchsafing exclusive powers to the State regarding defence and external trade respectively. Second final provision. Complementary regulation. For all events not envisaged in this Regulation regarding the control of external trade in defence material, other material and dual-use items and technologies, Order ITC/2880/2005 of 1 August 2005 regulating the procedure for processing of administrative export authorisations and pre-export notifications and the 24 November 1998 Order of the Ministry of Economy and Finance regulating the procedure and processing of administrative import authorisations and pre-import notifications, shall be applied subsidiarily. Third final provision. Implementing legislation.

5 The Ministers of the Economy and Competitiveness, Foreign Affairs and Cooperation, Defence, Finance and Public Administration, Interior, Industry Energy and Tourism and the Presidency, in the sphere of their respective competences, shall enact the provisions necessary for the enforcement and implementation of the provisions laid down in this Royal Decree. Fourth final provision. Update of annexes and modification of forms. 1. The content of Annexes I, II, III, IV and V of the regulation controlling external trade in defence material, other material and dual-use items and technologies may be updated by order of the Minister of the Economy and Competitiveness, duly informed by the JIMDDU, in accordance with the changes approved by international bodies, international treaties, international export control and non-proliferation regimes and European Union regulations. 2. The Secretariat of State for Trade of the Ministry of the Economy and Competitiveness and the Directorate-General for Armament and Materiel of the Ministry of Defence may, within the sphere of their competence, amend Annex VI forms. In any case, the provision whereby such amendment is made must be published in the Official State Gazette. Fifth final provision. Entry into force. This Royal Decree shall enter into force on the day following its publication in the Official State Gazette. Given at Madrid, 1 August FELIPE R. The Vice-president of the Government and Minister of the Presidency, SORAYA SÁENZ DE SANTAMARÍA ANTÓN

6 Regulation on the control of external trade in defence material, other material and dualuse items and technologies CONTENTS Chapter I. General provisions. Section 1. Aim and requirements of authorisation Article 1. Purpose. Article 2. Authorisation requirement. Article 3. Authorisation exemption. Article 4. Control documents. Article 5. Authority to take decisions. Article 6. Time limits and effects of receiving no expressed notification of the decision. Article 7. Denial of authorisation requests and suspension and nullification of authorisations. Article 8. Administrative appeals. Article 9. Control measures. Article 10. Transit. Section 2. Special Register of External Trade Operators in Defence and Dual-use Material. Article 11. Regulation of the Special Register of External Trade Operators in Defence and Dual-use Material. Article 12. Characteristics of the REOCE. Article 13. Registration requirements and exemptions. Article 14. Obligations of those registered. Article 15. Procedure and processing. Section 3. The Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material. Article 16. Regulation of the Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material. Article 17. Makeup. Article 18. Duties. Section 4. Information and Parliamentary Control Article 19. Information and Parliamentary control. Chapter II. Type and regime of authorisations. Article 20. Operations subject to authorisation. Article 21. Regulations of reference. Article 22. Individual Transfer License for defence material, other material and dual-use items and technologies. Article 23. Global Transfer License for defence material, other material and dual-use items and technologies. Article 24. Global Project Licence for the transfer of defence material. Article 25. European Union General Export Authorisations for Dual-use Items and Technologies. Article 26. Brokering authorisation. Article 27. Preliminary Transfer Agreement for Defence Material, Other Material and Dualuse Items and Technologies. Article 28. General License for Intra-community Transfers of Defence Material. Article 29. Global Licence for the Transfer of Components of Defence Material. Article 30. Applicable control document forms. Article 31. Procedure.

7 CHAPTER I General provisions Section 1. Aim and requirements of authorisation Article 1. Purpose. The purpose of this Regulation is to lay down the conditions, requirements and procedure whereby to control external trade in defence material, other material and dual-use items and technologies, donations, concessions and leasing, duly complying with European Union regulations, international commitments undertaken by Spain, peace, stability and security considerations on the global and regional level and in the general interest of national defence or of national foreign policy. Article 2. Authorisation requirement. 1. Defence material. a) The following are subject to authorisation under the specific control of the Regulation: 1. Permanent and temporary exports and dispatch of the material included on the List of Defence Material in Annex I. 2. Permanent and temporary exports and dispatch of components, technology and production techniques arising from a licensed production agreement in accordance with the definition laid down in Article 3(16) of Law 53/2007 of 28 December 2007 on the control of external trade in defence and dual-use material. 3. Permanent and temporary imports of the material included on the Weapons of War list attached as Annex III.1, including those from list 1 of the Convention on the prohibition of the development, production, stockpiling and use of chemical weapons and on their destruction. 4. The permanent and temporary export of items and technologies, even if not expressly listed on the Military Goods Control List, shall be subject to authorisation under the following circumstances: i) Where the exporter has been informed by the competent Spanish authorities that the end-use of the materials in question is or may be, in its entirety or in part, to contribute to the development, production, handling, operation, maintenance, stockpiling, detection, identification or propagation of chemical, biological or nuclear weapons or of other explosive nuclear devices or to the development, production, maintenance or stockpiling of missiles capable of carrying such weapons. ii) Where the purchasing country or the country of destination is subject to a European Union embargo by virtue of a decision taken by the Organisation for Security and Cooperation in Europe or an arms embargo imposed by binding resolution of the United Nations Security Council and if the exporter has been informed by the competent Spanish authorities that the items in question are or may be intended, in their entirety or in part, for a military end-use. For the purposes of this paragraph, military end-use shall mean: the incorporation into military items listed in the List of Defence Material; the use of production, test or analytical equipment and components therefor, for the development, production or maintenance of military items listed in the above-mentioned list; use of any unfinished products in a plant for the production of military items listed in the above-mentioned list. iii) Where the exporter has been informed by the competent Spanish authorities that the items in question are or may be intended, in their entirety or in part, for use as parts or components of military items listed in the Military Goods Control List that have been exported from Spanish territory without authorisation or in violation of a prescribed authorisation. iv) Where the exporter is aware or has reason to believe that these materials are intended or could be intended, in their entirety or in part, for any of the uses referred to in Article 2(1) a) 4 ii). v) Where the sale, supply, transfer or export of explosives and related equipment included on the lists of equipment which can be used for domestic repression require authorisation as a result of the European Union imposing restrictive measures on certain

8 destinations. These authorisations shall refer only to explosives and related equipment for civilian use by the mining and infrastructure sectors and to technical assistance, brokering and other services. b) An Individual Transfer License is not required for the introduction of intra-community transfers of the defence material listed in Annex I.1 of the Military Goods Controls from any European Union Member State. Such transfers are subject to a prior dispatch authorisation issued by the competent authorities of the country from which said defence material is dispatched. c) Having regard to Council Common Position 2003/468/CFSP of 23 June 2003 on the control of arms brokering, all brokering activity, i.e. activities carried out by natural or legal persons for the purpose of negotiating or arranging transactions in Spanish territory which could imply the transfer of items listed in Annex I.1 of the EU Common List of Military Equipment from a third country to any other third country or for the purpose of buying, selling, or arranging for the transfer of the said items of their property from a third country to any other third country. d) The provisions of Article 2(1) are without prejudice to the provisions of Royal Decree 137/1993 of 29 January 1993 establishing the Arms Regulation and subsequent amendments, Royal Decree 230/1998 of 16 February 1998 establishing the Explosives Regulation and subsequent amendments and the Pyrotechnics and Ammunition Regulation approved by Royal Decree 563/2010 of 7 May Other Material. a) The following are subject to authorisation under the specific control of the Regulation: 1. The permanent and temporary export of the material listed in Annex II. 2. The permanent and temporary dispatch of the material listed in paragraph 2 of Annex II.1 and in Annex II The permanent and temporary import of the material listed in Annex III The permanent and temporary introduction of the material listed in paragraphs 2 and 3 of Annex III.2. b) The dispatch and introduction of firearms for civilian use, their parts, components and ammunition described in Annexes II.1 and III.2 to/from European Union countries do not require authorisation within the scope of this Regulation. These transfers shall be regulated in accordance with the provisions of Chapter II, Section 6 of the Weapons Regulation passed by Royal Decree 137/1993 of 29 January 1993 and subsequent amendments, Title VII, Chapter V of the Explosives Regulation approved by Royal Decree 230/1998 of 16 February 1998 and subsequent amendments, and of Title VIII, Chapter V of the Pyrotechnics and Ammunition Regulation approved by Royal Decree 563/2010 of 7 May c) Export authorisations and import and transit measures for firearms, their parts and essential components and ammunition shall be controlled by Regulation (EU) No 258/2012 of the European Parliament and of the Council of 14 March 2012 implementing Article 10 of the United Nations Protocol against the illicit manufacturing of and trafficking in firearms, their parts and components and ammunition, supplementing the United Nations Convention against Transnational Organised Crime and establishing export authorisation and import and transit measures for firearms, their parts and components and ammunition. d) No authorisation is needed within the scope of this Regulation for the temporary export and re-export of regulated firearms, their components and ammunition, undertaken by natural persons, that are not related with economic or commercial activity and are intended for hunting outings or sport shooting. 3. Dual-use items and technologies. a) The following are subject to authorisation under the specific control of the Regulation: 1. The permanent and temporary export and dispatch of dual-use items and technologies in accordance with Council Regulation (EC) 428/2009 of 5 May 2009 and provisions amending or replacing it.

9 2. Technical assistance as per Council Joint Action of 22 June 2000 concerning the control of technical assistance related to certain military end-uses, including Article 3 thereof. 3. The permanent and temporary import of the nuclear dual-use items included in Annex III.3 in accordance with Article 4(2) of the Convention on the Physical Protection of Nuclear Material of 3 March The permanent and temporary import and introduction of the dual-use items and technologies included in Annex III.3 in compliance with Article 2 of Law 49/1999 of 20 December 1999 on control measures applicable to chemicals liable to be diverted for the manufacture of chemical weapons that are included on lists 1, 2 and 3 of the Convention on the prohibition of the development, production, stockpiling and use of chemical weapons and on their destruction. 5) The transfer of dual-use items and technologies referred to in the prohibition envisaged in Article III of the 10 April 1972 Convention on the prohibition of the development, production and stockpiling of bacteriological (biological) weapons and toxins and on their destruction as concerns microbial agents or other biological agents or toxins, regardless of their origin or production method or of the equipment or vectors designed for the use of the said agents or toxins for hostile purposes or in armed conflicts, shall be subject to control. 6. The provision of brokering services as concerns dual-use items and technologies as defined under Article 2 of Regulation (EC) No 428/2009 of 5 May 2009 and subsequent amendments. b) The provision of brokering services as concerns the dual-use items and technologies listed in Annex I of Council Regulation (EC) No 428/2009 of 5 May 2009 and subsequent amendments, where the operator has been informed by the Secretariat of State for Trade that the items in question are or may be intended, in their entirety or in part, for any of the uses referred to in Article 4(1) and (2). c) If the operator is aware or has reason to believe that the dual-use items and technologies listed in Annex I of Council Regulation (EC) No 428/2009 of 5 May 2009 and its subsequent amendments concerning which it is providing its services, are or may be intended, in their entirety or in part, for any of the uses referred to in Article 4(1) and (2) of said Regulation, it must report this fact to the Secretariat of State for Trade which will decide, duly informed by the Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material, hereafter JIMDDU, whether the brokering of said items and technologies requires authorisation. Article 3. Authorisation exemption. Pursuant to Article 5 of Law 53/2007 of 28 December 2007, no administrative authorisation shall be required for the transfer of defence material, other material or dual-use items and technologies which accompany or are to be used by the Spanish Armed Forces or the State Police and Security Forces on manoeuvres or missions outside of Spain for the purpose of humanitarian operations, peace-keeping or other international commitments. The same applies to material accompanying or to be used by armies of other countries on combined or joint manoeuvres with the Spanish Armed Forces in national territory, including temporary leasing arrangements, for the operations cited above of the aforementioned materials, items or technologies and the use of consumables. In these cases, if it is decided to sell or donate the aforementioned materials, items or technologies when they are outside of the territory of the exporting or dispatching country, the requisite administrative transfer authorisation must be requested and the delivery of the materials may be made from or at the place where they are located. Article 4. Control documents. 1. The requests for authorisation referred to in the foregoing articles must be accompanied by the control documents stipulated in Article 30 in order to provide sufficient guarantee that the destination and, if relevant, the end-use of materials, products and technologies are within the scope of the corresponding authorisation. 2. Also, authorisation requests must include information regarding transit countries and means of transport used in the transfers. In the case of brokering transactions, this information shall also include the financing used.

10 Article 5. Authority to take decisions. 1. Decisions regarding applications for authorisation within the ambit of this Regulation are to be taken by the head of the Secretariat of State for Trade of the Ministry of the Economy and Competitiveness. 2. The Deputy Directorate-General for International Trade in Defence and Dual-use Material shall be responsible for processing the applications referred to in this regulation. Article 6. Time limits and effects of receiving no expressed notification of the decision. 1. A decision regarding applications for authorisation must be communicated within a maximum of six months unless a longer period is established by a norm with a rank equal or higher than that of a law. 2. In the event that the foregoing period of time elapses and no expressed resolution is forthcoming the applicants, in accordance with paragraph 2 of the Twenty-ninth Additional Provision of the Fiscal, Administrative and Social Order Act, Law 14/2000 of 29 December 2000, may assume that their request has been denied. 3. In respect of all issues not envisaged under Law 53/2007 of 28 December 2007 and by this Regulation, the procedure for the concession of authorisations shall be governed by the provisions of the Public Administrations (legal regime) and Common Administrative Procedure Act, Law 30/1992 of 26 November 1992 and subsequent amendments and by Royal Decree 1778/1994 of 5 August 1994 adapting the regulatory norms related to authorisation issues, amendment and cancellation proceedings to the said Law. Article 7. Denial of authorisation requests and suspension and nullification of authorisations. 1. The authorisations referred to in Article 2 may be suspended, denied or revoked by the head of the Secretariat of State for Trade in the following cases: a) When there is reasonable suspicion that the defence material, other material or dualuse items and technologies may be used for actions which could disturb the peace, stability or security on a global or regional scale, could heighten tensions or latent conflicts, could be used in such a way as to disrespect the inherent dignity of human beings, could be used for domestic repression or in situations of serious violation of international human rights law or international humanitarian law, are destined to countries with a record of diverting transferred material or which could violate international commitments undertaken by Spain. In determining reasonable suspicion, due consideration shall be given to the reports on transfers of defence material and the final destination of these operations issued by international organisations in which Spain participates, reports issued by human rights bodies and other United Nations organisations, information furnished by organisations and research centres of acknowledged prestige in the areas of development, peace and security, disarmament, demobilisation and human rights and the most up to date best practices described in the User s Guide of Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment. b) When they contravene national security, defence and foreign policy interests. c) In the cases envisaged under Article 6 Prohibitions or cases of breach of the parameters laid down in Article 7 Export and export assessment of the Arms Trade Treaty passed on 2 April 2013, signed by Spain on 3 June 2013 and ratified on 2 April d) When they violate the guidelines agreed by the European Union, particularly the criteria of Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment and the criteria adopted in the 24 October 2000 Document of the Organisation for Security and Co-operation in Europe (OSCE) on Small Arms and Light Weapons and other applicable international provisions of which Spain is signatory. The most up to date best practices described in the User Handbook shall be used in applying the criteria of the Common Position. e) When they contravene the limits set by International and European Union Law such as, inter alia, the need to respect embargoes ordered by the United Nations and the European Union.

11 f) When there is a need to protect essential national security or public order interests, the authorisations for General Transfer Licenses of Defence Material referred to in Article 28 may be revoked. 2. In any case, authorisations must be revoked if the conditions to which they are subject and on the basis of which they were awarded are not respected or if the applicant provides false information or omits information. 3. If it is believed that there is a serious risk that a recipient certified by another Member State in accordance with the criteria laid down in Article 9 of Directive 2009/43/EC of the European Parliament and of the Council of 6 May 2009, is in breach of the conditions of a General License for Intra-community Transfers of Defence Material, or if public order, public security or essential security interests are believed to be at risk, the Member State that certified said recipient firm must be notified and asked to verify the situation. If the doubt persists, the effects of the General Licence for Intra-community Transfers of Defence Material with respect to the recipients in question may be temporarily suspended, information being furnished to the European Commission and the other Member States of the reasons for this safeguard measure which may be lifted if deemed unjustified. 4. The nullification or suspension of authorisations requires an appropriate administrative enquiry whereby the interested party will have the benefit of a hearing which shall adhere to the provisions of Law 30/1992 of 26 November 1992 and subsequent amendments and Royal Decree 1778/1994 of 5 August Article 8. Administrative appeals. The decisions handed down by the head of the Secretariat of State for Trade of the Ministry of the Economy and Competitiveness may be appealed to a higher court pursuant to Article 114 of Law 30/1992 of 26 November Article 9. Control measures. 1. The holders of the attendant authorisations shall be subject to inspection by the Secretariat of State for Trade of the Ministry of the Economy and Competitiveness and by the Department of Customs and Excise Duties of the Ministry of Finance and Public Administration and must keep all of the documentation related to the transactions which is not already in the possession of the General State Administration on file and at the disposal of the said inspection bodies for a period of ten years following the date of expiration of the authorisation. Every six months authorisation holders must remit the total or partial dispatches of defence material, other material and dual-use items and technologies under each transfer authorisation corresponding to the previous six-month period to the Deputy Directorate-General for International Trade in Defence and Dual-use Material of the Ministry of the Economy and Competitiveness or, as the case may be, issue a statement indicating that no transaction was undertaken. 2. For transactions involving dual-use items and technologies, including the provision of brokering services, operators or brokers are also subject to the control measures laid down in Chapter VII of Council Regulation (EC) No 428/2009 of 5 May 2009 and all provisions amending or replacing it. 3. The Department of Customs and Excise Duties must submit a half-yearly report to the Secretariat of State for Trade of the total or partial dispatch statistics regarding the authorisations issued by the Secretariat of State for Trade for the transfer of defence material, other material and dual-use items and technology. 4. Pursuant to Article 5 of Council Common Position 2003/468/CFSP of 23 June 2003 on the control of arms brokering, the Secretariat of State for Trade shall exchange information concerning arms brokering activities with European Union Member States and with third states, as the case may be, especially concerning applicable legislation, registered brokers (if relevant), information sheets on brokers and registration application denials (if relevant) and of authorisation requests. In the event that several Member States participate in the control of the same brokering transaction, consultations shall be undertaken with the competent authorities of the Member State(s) in question furnishing them with all pertinent information. Possible objections lodged by the Member State(s) shall be binding in terms of the concession of authorisation for the

12 brokering activity in question. If no objections have been lodged within ten working days, it shall be assumed that the Member State(s) consulted do not have any objection. Article 10. Transit. 1. Pursuant to Article 11 of Law 53/2007 of 28 December 2007, the General State Administration may immediately undertake to detain defence material, other material and dualuse items and technologies in transit through territory, maritime area or airspace subject to Spanish sovereignty when warranted by the cases envisaged in Article 8 of that Law. 2. The Ministry of Foreign Affairs and Cooperation shall inform the JIMDDU on a regular basis regarding authorisations it has issued for the transfer of defence material through national territory. Section 2. Special Register of External Trade Operators in Defence and Dual-use Material Article 11. Regulation of the Special Register of External Trade Operators in Defence and Dualuse Material. The Special Register of External Trade Operators in Defence and Dual-use Material, hereafter REOCE, shall have the characteristics and adhere to the processing procedures regulated under Articles 12 to 15. Article 12. Characteristics of the REOCE. 1. The purpose of the REOCE is to record the data of external trade operators dealing in defence material, other material and dual-use items and technologies that engage in activities subject to control under Law 53/2007 of 28 December 2007 and under this Regulation. 2. Operators who engage in these activities, including both natural and legal persons, are under obligation to furnish their personal data in accordance with this Regulation. 3. The personal data collection procedure is via transcription of the documentation furnished by the interested parties. 4. The data appearing in the REOCE is based on the personal data included in the registration application form attached hereto as Annex VI The administrative body responsible for the REOCE is the Secretariat of State for Trade of the Ministry of the Economy and Competitiveness before which operators can exercise their right to access, rectification, cancellation and opposition. 6. The REOCE shall be assigned a medium level of security. 7. Information is partially automated by means of a data processing system. Article 13. Registration requirements and exemptions. 1. Only operators figuring in the REOCE may apply for authorisation to engage in export-dispatch, import-introduction or brokering transactions of the materials, items and technologies referred to herein. Inscription in the former Special Register of Exporters shall remain valid and effective with respect to the transactions initially giving rise to the operator's access to the Register. 2. Inscription in REOCE is limited to those natural or legal persons who are residents in Spain; no exception being made in the case of businesses with legal domicile in tax havens. 3. Spanish firms with direct or indirect foreign capital related with the manufacture, trade in or distribution of weapons and explosives for civilian use and with activities related with National Defence, must furnish evidence that the foreign investor in question has administrative authorisation from the Council of Ministers. The said authorisation shall be issued in accordance with Royal Decree 664/1999 of 23 April 1999 on foreign investment. 4. Pursuant to Article 10 of the Weapons Regulation approved by Royal Decree 137/1993 of 29 January 1993, all natural or legal persons engaging in the permanent or temporary transfer of regulated firearms as part of their professional activity must have first obtained an authorisation of their status as a dealer or broker from the Directorate-General of the Guardia Civil.

13 5. Administrative bodies of the Armed Forces, State law enforcement officials attached to the National Government, law enforcement bodies belonging to the Autonomous Communities and local police forces are exempted from the registration requirements set out in paragraph 1. However, export-dispatch and import-introduction transactions corresponding to the aforementioned bodies are subject to the provisions of this regulation in respect of the authorisation requirement and the compulsory JIMDDU report referred to in Articles 2 and This same inscription exemption shall apply to natural persons when a transfer transaction is undertaken regarding firearms not arising from economic or commercial activity. Article 14. Obligations of those registered. 1. Only the transactions described in the registration request of the corresponding operator may be authorised. 2. Registered operators shall maintain records or statements in accordance with Article 9(1). 3. Registered operators who are dealers or brokers must keep a record of all firearms transfers made and these records must contain the data referred to in Article 10(2) of the Weapons Regulation in the wording of Royal Decree 976/2011 of 8 July Article 15. Procedure and processing. 1. Applications for inscription in the REOCE are submitted to the Secretariat of State for Trade using the form attached hereto as Annex VI.15. Registered operators must report any changes in the data recorded on the application by means of the same form within a period of thirty working days as from the date said changes were made. 2. The registration form shall be submitted in duplicate, one copy for the Secretariat of State for Trade and the other for the applicant. 3. The Secretariat of State for Trade may call on the interested party to furnish greater detail or supplementary information in respect of the data set out on the application form. 4. The data provided on the application form and any further information communicated to the Deputy Directorate-General for International Trade in Defence and Dual-use Material will be reserved for the Administration and not communicated to any other body of the Public Administration except where necessary to comply with the duties laid down in the regulation so that all members of the JIMDDU have objective data with which to perform their analyses and issue their compulsory reports. 5. Processing shall commence upon submission of the duly completed request form at the General Registry of the Ministry of Economy and Competitiveness or at the Regional or Territorial Trade Directorates. This form may also be submitted at any of the locations envisaged under Article 38(4) of Law 30/1992 of 26 November Once the request form is submitted, the head of the Secretariat of State for Trade, duly informed by the JIMDDU, shall deliver a decision concerning the entry and the interested party shall be notified of the latter within 60 working days from the date of submission. 7. In issuing its report the JIMDDU must check whether any document exists indicating the participation of the applicant or operator in unlawful activities, of having committed any of the acts classified in Organic Law 12/1995 of 12 December 1995 on the repression of smuggling or whether the operator lacks guarantees of its capacity to effectively control the transfers of the materials, items or technologies included on the registration application, in which case said application would be denied. Special attention will be paid to checking whether applicant undertakings have been convicted of crimes related to the corruption of foreign public officials in its international trade dealings and to this end a statement from the interested party is required. This would be cause for the temporary or permanent suspension of inscription in the REOCE which must be communicated to the Deputy Directorate-General for International Trade in Services and Investments of the Ministry of the Economy and Competitiveness in accordance with the OECD Recommendation and in application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Moreover, in the event of a change in the initial conditions in the sense just described, the suspension or nullification of a previously approved registration may be proposed.

14 Section 3. The Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material. Article 16. Regulation of the Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material. The make-up and duties of the Inter-Ministerial Regulatory Board on External Trade in Defence and Dual-Use Material (JIMDDU) are laid down in Articles 17 and 18. Article 17. Makeup. 1. The JIMDDU is attached to the Ministry of the Economy and Competitiveness and shall be composed of the following members: a) President: The Secretary of State for Trade of the Ministry of the Economy and Competitiveness. b) Vice-president: the Secretary of State for Foreign Affairs of the Ministry of Foreign Affairs and Cooperation. c) Members: The Director-General for Foreign Policy and Multi-lateral, Global and Security Affairs of the Ministry of Foreign Affairs and Cooperation. The Director-General for Armament and Materiel of the Ministry of Defence. The Director of the Department of Customs and Excise Duties of the National Tax Administration Agency attached to the Ministry of Finance and Public Administration. The Director-General of the Guardia Civil of the Ministry of the Interior. The Director-General of the Police of the Ministry of the Interior. The Technical Secretary-General of the Ministry of Industry, Energy and Tourism. The Director of Intelligence of the National Centre for Intelligence of the Ministry of the Presidency. The Director-General of International Trade and Investment of the Ministry of the Economy and Competitiveness. 2. The Deputy Director-General for International Trade in Defence and Dual-use Material of the Ministry of the Economy and Competitiveness shall act as the Secretary of the JIMDDU with speaking but not voting rights. 3. In the event of resignation, absence, illness or other legal cause, the President shall be replaced by the Vice-president and, failing that, by the member of the collegiate body of highest rank, seniority and age, in that order, from among its members. 4. The Vice-president and Members may expressly name their own replacements for each meeting of the JIMDDU. These replacements must hold a post with minimum rank of Deputy Director-General or equivalent. 5. In the case of resignation, absence or illness, the Secretary shall be replaced by a civil servant appointed to the Deputy Directorate-General for International Trade in Defence and Dual-use Material. 6. When warranted due to the nature of affairs under consideration, the members of the JIMDDU may summon other Government representatives or area experts to Board meetings who will act with speaking but not voting rights. 7. The JIMDDU may, when necessary for the proper discharge of its assigned duties and for this sole purpose, gather information from the bodies and organisations of other National and lower level administrations needed to carry out its duties referred to in Article 18(1) and 18(4), always in compliance with the laws currently in force and especially with the provisions of the special legislation in respect of personal data protection. 8. The JIMDDU shall set up a working group comprised of representatives of all of the ministries forming part of this collegiate body with minimum rank of deputy director-general or equivalent for the purpose of discussing and drafting proposals to be submitted to the Board concerning affairs so requiring. The working group may meet with the participation of all or some of its appointed members or experts designated by the latter. 9. The operation of the JIMDDU shall conform to the provisions of chapter II, title II of Law 30/1992 of 26 November 1992 as regards collegiate bodies.